{"id":59602,"date":"2017-01-09T00:19:00","date_gmt":"2017-01-08T23:19:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/ctas-move-higher-at-the-turn-of-the-year\/"},"modified":"2019-12-31T01:23:21","modified_gmt":"2019-12-31T00:23:21","slug":"ctas-move-higher-at-the-turn-of-the-year","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/ctas-move-higher-at-the-turn-of-the-year\/","title":{"rendered":"CTAs Move Higher At The Turn of The Year"},"content":{"rendered":"Hedge funds underperformed global equity and bond indices in 2016, while active mutual\nfunds failed to beat their benchmarks. A very small proportion of both European and US\nequity mutual funds outperformed their benchmarks in 2016 (see attached<\/a>). Active investors in the\nfixed income space also struggled. \nOn a positive note, we find that Asian equity mutual\nfunds delivered alpha. In particular, active funds focused on Japanese equities, which tend\nto be value-oriented, benefitted from the rotation from quality to value.<\/quote>\n\n\nIn 2017, active investing could experience a better environment provided that expectations\nfor firmer economic activity are met. And we believe there is room for the new U.S.\nadministration to extend the economic cycle. We expect the Fed to stay accommodative\noverall and both bond yields and energy prices to remain supportive for growth. However, if\nTrump\u2019s reflation hopes get disappointed, markets will experience another reversal which\nwill hurt active investors that turned more aggressive over the recent months.\n\nWith regards to recent hedge fund performance, the last two weeks of December were\nsupportive and saw both CTAs and Global Macro managers delivering healthy returns. L\/S\nEquity managers underperformed as the rebound in cyclical stocks paused.\n\n\nGoing forward, we believe there is room for U.S. L\/S Equity managers to take advantage of\nhigher stock dispersion in 2017. Meanwhile, higher U.S. corporate activity would foster\nEvent-Driven funds.<\/quote>\n We are more conservative on European managers in the L\/S Equity and\nEvent Driven space. Finally, we recently reweighted CTAs. We believe that the environment\nfor momentum investing should improve in 2017. \n\n\"the_poor_performance_of_ctas_in_q4_came_to_a_halt_in_december_-_we_upgraded_the_strategy_to_slight_overweight.jpg\"<\/a>